Film industry’s tax incentive program pays, rather than costs, us

I was born in Prince George, and grew up in Vernon. In high school, I excelled in drama and stagecraft. I loved it. I participated in one way or another in the plays that the drama department put on. After I graduated from high school, I went off to find my way in the world. I knew I wanted to keep pursuing the creative arts, but didn’t know how to go about it. Eventually, I found my way into the film industry in 2000, and felt I had found my calling.

Thirteen years later, there is no doubt that I love my job. However, when I first entered the industry, I never imagined that down the road I would end up having to fight so hard to save it in an industry that has no upfront costs, or environmental impact.

But that is what is now happening. For the last few weeks I’ve been embroiled in a battle of words regarding the state of the film industry. Information, numbers, and percentages are being thrown around. After reading an article that was very anti-film, and what I believed contained a lot of false information, I thought a perspective from someone from within the film industry was needed.

I responded to the writer of the article, as well as the editor, who was gracious enough for me to submit my own article. But first I wanted to differentiate between speculation, and truth. So I called BC Film and Media to inquire about the tax incentive program for production companies.

To clarify, the tax incentive program is not a subsidy paid for by the taxpayers. The government does not give money to production companies to operate.

It is a 33-per-cent labour only tax incentive. At the conclusion of business, a production company adds up the taxes taken off the employees that have worked on the production that are B.C. residents (who must provide identification to verify they are indeed B.C. residents), and claims that to the provincial government. The provincial government then gives 33 per cent of those taxes back to the production company.

To be clear, this is a tax incentive program for production companies to hire B.C. residents. So essentially, it is we in the film industry who pay for the tax incentive program with cooperation from the provincial government.

What we are lobbying for the government to do is reassess the tax incentive program to make it more competitive with Ontario and Quebec, which raised their tax incentive programs a few years ago to a 25-per-cent cover-all tax incentive.

By doing so, any action the B.C. provincial government takes will come at no cost to the taxpayer. It just means the government will be giving back a little more to the production companies, but keeping thousands of film industry workers off Employment Insurance, and having 30-40 per cent of their paycheques taxed again. Which brings us to the next topic.

In recent years, the industry has been clumped into four sectors: television and features (which I work in), VFX only (animation), commercials, and gaming. All together, these sectors employ over 80,000 people, over 25,000 in television and features.

But let’s just focus on the television and features employees, as we are the ones asking for help from the government with the tax incentive program. It is this sector that is claiming a 90-per-cent unemployment rate. So when B.C. Premier Christy Clark says that a 90-per-cent unemployment rate is exaggerated, she is correct from the view of a screen-based industry. But from within the television and features section, a 90-per-cent unemployment rate is accurate. We are just not used to having animation and gaming included in the annual figures released about the film industry.

Aside from an increased tax revenue flow into the system, what is often not mentioned are the spinoff benefits when a production comes to B.C. to film. Hotels, restaurants, car rentals, coffee shops, locations fees, permits, just to name a few.

When a production spends money on that, those are taxes the production company does not get back. The businesses and people in those jobs take that money, and spend it, thus getting taxed. In turn, those businesses and employees will spend that money, and be taxed. The spinoff benefits are numerous, and exponential. They can’t be tracked, but when talking about figures should not be forgotten. Estimates have it that for every film industry dollar spent, it adds $6 to the economy.

With all the talk about how much production companies get back, there is little mention about how much production companies put into the province.

Statistics from BC Film and Media for 2011-12 have the screen-based industry putting $1.3 billion into the province, while the government gave back $251 million in tax incentives. And these figures don’t include the spinoff benefits I mentioned earlier as those can’t be tracked.

If the television and features tax incentives had been more competitive, this total would have been a lot more. I don’t know about you, but I am OK with giving back a little if it means that I, and 20,000 plus of my fellow employees, go back to work, and contribute hundreds of millions of dollars into the system.

After all, if you don’t work in the film industry, it will not cost you a dime.

Daryl Makortoff is a rigging grip, and began his film industry career in January 2000, working on feature films including Tron: Legacy and Rise of the Planet of the Apes.

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